NVIDIA Beats & Raises in Q4; Late Trading +8%
Wednesday, February 21st, 2024
It’s tough to recall a more highly awaited single-quarter for a single company than NVIDIA’s NVDA fiscal Q4 results after today’s close. The leader of the A.I.-based tech stocks that became known as the Magnificent 7 roughly a year ago has only gotten stronger in 2024 than last year — at least until the last couple trading days. A slight level of trepidation began to creep in; would this great graphics chips company be able to continue to bring awe to Wall Street?
Keep in mind we happen to be at a time in the U.S. economy of continued uncertainty, as fleshed out in the Fed minutes from the latest FOMC meeting on January 30-31 (more on this later). NVIDIA shares had grown nearly +250% over the past year, and only started selling off somewhat as this earnings report grew nearer. To further complicate things, the “whisper number” on the Street was undoubtedly higher than consensus expectations — meaning even a solid beat may not be enough to quench stock buyers’ thirst upon the Q4 release.
Typically, NVIDIA beat estimates on both top and bottom lines, seemingly without breaking a sweat. Earnings of $5.16 per share — representing an eye-popping +769% year-over-year growth — on $22.1 billion in quarterly sales easily surpassed the $4.55 per share and $20.31 billion in the Zacks consensus, respectively. Its all-important Data Center segment grew +38% year over year to $18.4 billion, nearly a billion and a half dollars more than analysts were expecting. And this was without full participation of its China business, which continued to be hampered by U.S. licensing restrictions. Its Auto segment also beat estimates to $281 million in the quarter.
Fiscal Q1 revenue guidance was also impressive: $24 billion compared to the $21.5 billion analysts had been looking for. We don’t know exactly what the “whisper numbers” were for NVIDIA in the quarter, but apparently they had not been met: immediately upon the report’s release, shares fell another -3% on the news, after shedding nearly -8% from all-times highs registered a week ago. Yet in just the past few minutes, NVIDIA’s fortunes have changed — shares are now +8% in today’s after-market, and are up for related companies like Super Micro Computer SMCI and Advanced Micro Devices AMD, as well.
Elsewhere, upstart EV maker Rivian RIVN posted slight beats on both top and bottom lines compared with Zacks consenses, but forecast a lower total number of vehicles expected to be made in 2024: 57K, roughly the same as the company produced in 2023, below the 66K analysts following the company were expecting. Shares are now down -13.7% in late trading, adding to the already precipitous -27% drop year to date.
Etsy ETSY shares are also down, nearly -3% at this hour, as the specialty e-commerce platform posted a big miss on Q4 earnings — 62 cents per share versus 78 cents expected — while outperforming on the top line, with revenues of $842 million from $827.4 million in the Zacks consensus. Etsy also guided to a top-line next quarter anticipated to be the low point of 2024, with a pickup expected later in the year.
Finally, minutes from the Federal Open Market Committee (FOMC) were released at 2pm ET today, depicting a monetary body ahead of the market when it came to apprehension about the risks of a heating-up economy. The minutes showed the Fed already ruminating upside inflation possibilities at its two-day meeting at the end of last month, and as a group appeared in no hurry to begin cutting interest rates. Certainly not at its March 19-20 meeting; the next FOMC deliberation doesn’t happen until April 30-May 1st. By then we should have a clearer look at how the economy is clicking along, or whether it may then be in need of a rate cut.
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